Faulty Flipping: Ali Ata Counts the Common Mistakes in House Flipping
First-time flipper? Ali Ata says that there’s a renewed interest in flipping houses. It’s a combination of the influence found from reality shows about house flipping and learning about how much money people make from flipping houses. Especially with all the intense demand for homes and sky-high prices this summer. But if you’re looking to get into flipping houses, you’ll need to make sure you don’t make these potentially costly mistakes.
Don’t underestimate how much things cost.
This is one of the biggest problems that the “veteran” flippers have with beginners. It may look simple and easy to do on television, but the costs accrued by flipping a house are no joke, and Ali Ata warns flippers to be prepared to shell out a lot to get great results. Consider it an investment.
Be patient, as excellence takes time.
It won’t be a fast process either. The reconstruction and renovations that some houses will need (or that you’ll require for it) won’t happen in the span of one episode. You have to be patient and wait for things to be done correctly. You’ll also need to take the time to inspect the work and have professionals inspect it as well. You can’t be negligent on this end.
Remember the 70% Rule.
Something that first-timers make is forgetting to adhere to the 70% rule. Ali Ata explains that you should not ever pay more than 70% of a property’s fixed-up fair market value. This gives you that all-important margin for upgrades while still making a profit. Don’t be tempted to “make the numbers work” for something like this, or you’ll find yourself taking a hit instead.
Don’t forget those building permits!
Ensure everything is done above board with the proper permissions and permits according to the city’s laws. The last thing you want is to be stopped halfway into your work because something isn’t allowed. Those are costly mistakes.